August 9, 2022

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CrowdStrike Reports Fiscal Third Quarter 2021 Financial Results

15 min read

SUNNYVALE, Calif.–(BUSINESS WIRE)–Dec 2, 2020–

CrowdStrike Holdings, Inc., (Nasdaq: CRWD), a leader in cloud-delivered endpoint and cloud workload protection, today announced financial results for the third quarter of its fiscal 2021, ended October 31, 2020.

“CrowdStrike delivered a record third quarter with results exceeding our expectations across the board. Broad-based demand and strength in multiple areas of the business fueled our rapid 87% year-over-year subscription revenue growth, record net new ARR of $117 million and record 1,186 net new subscription customers. CrowdStrike’s robust growth at scale underscores our growing leadership in the Security Cloud category and the immense value we deliver to customers seeking to transform, consolidate and fortify their security posture,” said George Kurtz, CrowdStrike’s co-founder and chief executive officer.

“Our industry-leading cloud-native platform powered by Threat Graph enables us to rapidly bring new modules to market and drive customer adoption. With our expanding portfolio of capabilities, which includes three recently announced new modules and the addition of leading Zero Trust capabilities through our acquisition of Preempt Security, we believe we are well-positioned to continue our momentum and extend our Security Cloud leadership,” concluded Kurtz.

Commenting on the company’s financial results, Burt Podbere, CrowdStrike’s chief financial officer, added, “We continued to drive operating leverage and record unit economics. As a result of our strong execution in the quarter, we reduced GAAP operating loss year-over-year, achieved non-GAAP operating profitability for the third consecutive quarter and generated positive operating and free cash flow for the fifth consecutive quarter.”

Third Quarter Fiscal 2021 Financial Highlights

  • Revenue: Total revenue was $232.5 million, an 86% increase, compared to $125.1 million in the third quarter of fiscal 2020. Subscription revenue was $213.5 million, an 87% increase, compared to $114.2 million in the third quarter of fiscal 2020.
  • Annual Recurring Revenue (ARR) increased 81% year-over-year and grew to $907.4 million as of October 31, 2020, of which $116.8 million was net new ARR added in the quarter, including $6.8 million from the acquisition of Preempt Security.
  • Subscription Gross Margin: GAAP subscription gross margin was 77%, compared to 74% in the third quarter of fiscal 2020. Non-GAAP subscription gross margin was 78%, compared to 76% in the third quarter of fiscal 2020.
  • Income/Loss from Operations: GAAP loss from operations was $24.2 million, compared to $38.5 million in the third quarter of fiscal 2020. Non-GAAP income from operations was $18.9 million, compared to a loss of $16.5 million in the third quarter of fiscal 2020.
  • Net Income/Loss: GAAP net loss was $24.5 million, compared to $35.5 million in the third quarter of fiscal 2020. GAAP net loss per share, basic and diluted, was $0.11, compared to $0.17 in the third quarter of fiscal 2020. Non-GAAP net income was $18.6 million, compared to a loss of $13.4 million in the third quarter of fiscal 2020. Non-GAAP net income per share, diluted, was $0.08, compared to a loss of $0.07 in the third quarter of fiscal 2020.
  • Cash Flow: Net cash generated from operations was $88.5 million, compared to $38.6 million in the third quarter of fiscal 2020. Free cash flow was $76.1 million, compared to $7.0 million in the third quarter of fiscal 2020.
  • Cash and Cash Equivalents was $1,060 million as of October 31, 2020.

Recent Highlights

  • Added 1,186 net new subscription customers in the quarter, including 64 from the acquisition of Preempt Security, for a total of 8,416 subscription customers as of October 31, 2020, representing 85% growth year-over-year.
  • CrowdStrike’s subscription customers that have adopted four or more modules, five or more modules and six or more modules increased to 61%, 44%, and 22%, respectively, as of October 31, 2020.
  • Acquired Preempt Security, a leading provider of Zero Trust and conditional access technology for real-time access control and threat prevention.
  • Announced an alliance with EY to transform cyber risk management capabilities. The new alliance will help enterprises identify, prevent and respond to cyber threats.
  • Joined the ServiceNow® Service Graph Connector Program. The new integration provides users the ability to integrate device data from the CrowdStrike Falcon® platform into their incident response process and improve both the security and IT operations outcomes.
  • Expanded support for Amazon Web Services with integrations for the compute services and cloud services categories, enhancing development, security and operations (DevSecOps) to enable faster and more secure innovation that is easier to deploy.

Financial Outlook

CrowdStrike is providing the following guidance for the fourth quarter of fiscal 2021 (ending January 31, 2021) and increasing its guidance for fiscal year 2021 (ending January 31, 2021):







 

Q4 FY21
Guidance

 

Full Year FY21
Guidance

Total revenue

$245.5 – $250.5 million

 

$855.0 – $860.0 million

Non-GAAP income from operations

$18.5 – $22.1 million

 

$46.4 – $50.0 million

Non-GAAP net income

$17.7 – $21.3 million

 

$48.8 – $52.4 million

Non-GAAP net income per share, diluted

$0.08 – $0.09

 

$0.21 – $0.22

Weighted average shares used in computing Non-GAAP net income per share attributable to common stockholders, diluted

236 million

 

233 million

These statements are forward-looking and actual results may differ materially as a result of many factors. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Guidance for non-GAAP financial measures excludes stock-based compensation expense, amortization expense of acquired intangible assets, and acquisition-related expenses. We have not provided the most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, a reconciliation for non-GAAP loss from operations, non-GAAP net loss, and non-GAAP net loss per share is not available without unreasonable effort.

Conference Call Information

CrowdStrike will host a conference call for analysts and investors to discuss its earnings results for the third quarter of fiscal 2021 and outlook for its fiscal fourth quarter and year 2021 today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). A recorded webcast of the event will also be available for one year on the CrowdStrike Investor Relations website ir.crowdstrike.com.





Date:

     

December 2, 2020

Time:

     

2:00 p.m. Pacific time / 5:00 p.m. Eastern time

Dial-in number:

     

409-937-8967, conference ID: 1157826

Webcast:

     

ir.crowdstrike.com

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding our future financial and operating performance, including our financial outlook for the fiscal fourth quarter and fiscal year 2021. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the impact of the COVID-19 pandemic on our and our customers’ business; our limited operating history; our ability to successfully integrate acquisitions; our ability to identify and effectively implement the necessary changes to address execution challenges; risks associated with managing our rapid growth; our limited experience with new product and subscription and support introductions and the risks associated with new products and subscription and support offerings, including the risk of defects, errors, or vulnerabilities; our ability to attract new and retain existing customers; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscriptions and support; our ability to collaborate and integrate our products with offerings from other parties to deliver benefits to customers; rapidly evolving technological developments in the market for security products and subscription and support offerings; length of sales cycles; and general market, political, economic, and business conditions, including those related to COVID-19.

Additional risks and uncertainties that could affect our financial results are included in the filings we make with the Securities and Exchange Commission (“SEC”) from time to time, particularly under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, including our most recently filed Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and subsequent filings.

You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Use of Non-GAAP Financial Information

We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please refer to the financial tables below, as well as the “Explanation of Non-GAAP Financial Measures” section of this press release.

Channels for Disclosure of Information

We intend to announce material information to the public through the CrowdStrike Investor Relations website ir.crowdstrike.com, SEC filings, press releases, public conference calls, and public webcasts. We use these channels, as well as social media and our blog, to communicate with our investors, customers, and the public about our company, our offerings, and other issues. It is possible that the information we post on social media and our blog could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above, including the social media channels listed on our investor relations website, and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

About CrowdStrike Holdings

CrowdStrike® provides cloud-delivered endpoint and cloud workload protection. Leveraging artificial intelligence (AI), the CrowdStrike Falcon® platform protects customers against cyberattacks on endpoints on or off the network by offering visibility and protection across the enterprise.

Copyright © 2020 CrowdStrike, Inc. All rights reserved. CrowdStrike® and CrowdStrike Falcon® are the registered trademarks of CrowdStrike, Inc. CrowdStrike owns other trademarks and service marks, and may use the brands of third parties to identify their products and services.



























CROWDSTRIKE HOLDINGS, INC.

 

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

Revenue

 

 

 

 

 

 

 

Subscription

$

213,530

 

 

$

114,221

 

 

$

560,008

 

 

$

297,787

 

Professional services

18,930

 

 

10,898

 

 

49,501

 

 

31,517

 

Total revenue

232,460

 

 

125,119

 

 

609,509

 

 

329,304

 

Cost of revenue

 

 

 

 

 

 

 

Subscription (1)(2)

49,583

 

 

29,221

 

 

130,864

 

 

77,858

 

Professional services (1)

11,944

 

 

8,134

 

 

31,949

 

 

20,353

 

Total cost of revenue

61,527

 

 

37,355

 

 

162,813

 

 

98,211

 

Gross profit

170,933

 

 

87,764

 

 

446,696

 

 

231,093

 

Operating expenses

 

 

 

 

 

 

 

Sales and marketing (1)(2)

105,602

 

 

68,675

 

 

288,867

 

 

190,792

 

Research and development (1)(2)

57,539

 

 

35,992

 

 

148,600

 

 

91,497

 

General and administrative (1)(3)

31,951

 

 

21,615

 

 

85,955

 

 

63,737

 

Total operating expenses

195,092

 

 

126,282

 

 

523,422

 

 

346,026

 

Loss from operations

(24,159)

 

 

(38,518)

 

 

(76,726)

 

 

(114,933)

 

Interest expense

(193)

 

 

(132)

 

 

(510)

 

 

(297)

 

Other income, net

272

 

 

3,579

 

 

5,537

 

 

3,523

 

Loss before provision for income taxes

(24,080)

 

 

(35,071)

 

 

(71,699)

 

 

(111,707)

 

Provision for income taxes

(451)

 

 

(434)

 

 

(1,928)

 

 

(1,664)

 

Net loss

$

(24,531)

 

 

$

(35,505)

 

 

$

(73,627)

 

 

$

(113,371)

 

Net loss per share attributable to Class A and Class B common stockholders, basic and diluted

$

(0.11)

 

 

$

(0.17)

 

 

$

(0.34)

 

 

$

(0.89)

 

Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted

219,401

 

 

204,096

 

 

216,432

 

 

128,009

 

_____________________________

(1) Includes stock-based compensation expense as follows:










 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

 

(in thousands)

 

(in thousands)

Subscription cost of revenue

$

3,226

 

 

$

1,666

 

 

$

7,856

 

 

$

3,164

 

Professional services cost of revenue

1,551

 

 

784

 

 

3,947

 

 

1,531

 

Sales and marketing

12,811

 

 

7,355

 

 

35,101

 

 

15,511

 

Research and development

11,771

 

 

4,696

 

 

25,700

 

 

10,353

 

General and administrative

11,251

 

 

7,465

 

 

29,357

 

 

25,018

 

Total stock-based compensation expense

$

40,610

 

 

$

21,966

 

 

$

101,961

 

 

$

55,577

 

(2) Includes amortization of acquired intangible assets as follows:








 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

 

(in thousands)

 

(in thousands)

Subscription cost of revenue

$

272

 

 

$

61

 

 

$

397

 

 

$

262

 

Sales and marketing

91

 

 

30

 

 

153

 

 

92

 

Research and development

9

 

 

10

 

 

29

 

 

31

 

Total amortization of purchased intangibles

$

372

 

 

$

101

 

 

$

579

 

 

$

385

 

(3) Includes acquisition-related expenses as follows:






 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

 

(in thousands)

 

(in thousands)

General and administrative

$

2,119

 

 

$

 

 

$

2,119

 

 

$

 

Total acquisition-related expenses

$

2,119

 

 

$

 

 

$

2,119

 

 

$

 












































CROWDSTRIKE HOLDINGS, INC.

 

Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 

 

October 31,

 

January 31,

 

2020

 

2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,059,926

 

 

$

264,798

 

Marketable securities

 

 

647,266

 

Accounts receivable, net

172,775

 

 

164,987

 

Deferred contract acquisition costs, current

62,422

 

 

42,971

 

Prepaid expenses and other current assets

45,673

 

 

51,614

 

Total current assets

1,340,796

 

 

1,171,636

 

Strategic investments

2,500

 

 

1,000

 

Property and equipment, net

162,371

 

 

136,078

 

Operating lease right-of-use assets

38,376

 

 

 

Deferred contract acquisition costs, noncurrent

91,585

 

 

71,235

 

Goodwill

83,132

 

 

7,722

 

Intangible assets, net

16,356

 

 

527

 

Other assets

14,393

 

 

16,708

 

Total assets

$

1,749,509

 

 

$

1,404,906

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

7,494

 

 

$

1,345

 

Accrued expenses

39,975

 

 

30,355

 

Accrued payroll and benefits

56,468

 

 

36,810

 

Operating lease liabilities, current

8,646

 

 

 

Deferred revenue

579,671

 

 

412,985

 

Other current liabilities

9,785

 

 

11,601

 

Total current liabilities

702,039

 

 

493,096

 

Deferred revenue, noncurrent

183,003

 

 

158,183

 

Operating lease liabilities, noncurrent

34,006

 

 

 

Other liabilities, noncurrent

15,676

 

 

11,020

 

Total liabilities

934,724

 

 

662,299

 

Commitments and contingencies

 

 

 

Stockholders’ Equity

 

 

 

Common stock, Class A and Class B

111

 

 

106

 

Additional paid-in capital

1,523,873

 

 

1,378,479

 

Accumulated deficit

(711,114)

 

 

(637,487)

 

Accumulated other comprehensive income

615

 

 

1,009

 

Total CrowdStrike Holdings, Inc. stockholders’ equity

813,485

 

 

742,107

 

Non-controlling interest

1,300

 

 

500

 

Total stockholders’ equity

814,785

 

 

742,607

 

Total liabilities and stockholders’ equity

$

1,749,509

 

 

$

1,404,906

 





















































CROWDSTRIKE HOLDINGS, INC.

 

Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 

 

Nine Months Ended October 31,

 

2020

 

2019

Operating activities

 

 

 

Net loss

$

(73,627)

 

 

$

(113,371)

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

27,728

 

 

16,023

 

Amortization of intangible assets

579

 

 

385

 

Amortization of deferred contract acquisition costs

44,940

 

 

24,125

 

Non-cash operating lease cost

7,666

 

 

 

Change in fair value of redeemable convertible preferred stock warrant liability

 

 

6,022

 

Provision for bad debts

(448)

 

 

413

 

Stock-based compensation expense

101,961

 

 

55,577

 

Gain on sale of debt securities, net

(1,347)

 

 

 

Accretion (amortization) of marketable securities purchased at a discount

578

 

 

(1,313)

 

Non-cash interest expense

506

 

 

293

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable

(6,155)

 

 

(53,631)

 

Deferred contract acquisition costs

(84,741)

 

 

(55,238)

 

Prepaid expenses and other assets

1,487

 

 

(19,883)

 

Accounts payable

6,556

 

 

(3,773)

 

Accrued expenses and other current liabilities

1,643

 

 

3,405

 

Accrued payroll and benefits

18,712

 

 

17,621

 

Operating lease liabilities

(1,434)

 

 

 

Deferred revenue

189,582

 

 

157,239

 

Other liabilities

7,917

 

 

(58)

 

Net cash provided by operating activities

242,103

 

 

33,836

 

Investing activities

 

 

 

Purchases of property and equipment

(40,245)

 

 

(66,848)

 

Capitalized internal-use software

(6,345)

 

 

(5,208)

 

Business acquisition, net of cash acquired

(85,469)

 

 

 

Purchase of strategic investments

(1,500)

 

 

 

Purchases of marketable securities

(84,904)

 

 

(187,697)

 

Proceeds from sales of marketable securities

639,586

 

 

4,473

 

Maturities of marketable securities

91,605

 

 

197,764

 

Net cash provided by (used in) investing activities

512,728

 

 

(57,516)

 

Financing activities

 

 

 

Proceeds from the issuance of common stock upon initial public offering, net of underwriting discounts

 

 

665,092

 

Payments of deferred offering costs

 

 

(5,872)

 

Proceeds from issuance of common stock upon exercise of stock options

21,522

 

 

9,350

 

Proceeds from the issuance of common stock upon exercise of early exercisable stock options

 

 

10,264

 

Proceeds from issuance of common stock under the employee stock purchase plan

17,284

 

 

 

Capital contributions from non-controlling interest holders

800

 

 

 

Net cash provided by financing activities

39,606

 

 

678,834

 

 

 

 

 

Effect of foreign exchange rates on cash and cash equivalents

691

 

 

43

 

 

 

 

 

Net increase in cash and cash equivalents

795,128

 

 

655,197

 

 

 

 

 

Cash and cash equivalents, beginning of period

264,798

 

 

88,408

 

Cash and cash equivalents, end of period

$

1,059,926

 

 

$

743,605

 















CROWDSTRIKE HOLDINGS, INC.

 

Non-GAAP Financial Measures with Reconciliation to GAAP
(in thousands, except percentages)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

GAAP subscription revenue

$

213,530

 

 

$

114,221

 

 

$

560,008

 

 

$

297,787

 

 

 

 

 

 

 

 

 

GAAP subscription gross profit

$

163,947

 

 

$

85,000

 

 

$

429,144

 

 

$

219,929

 

Add: Stock-based compensation expense

3,226

 

 

1,666

 

 

7,856

 

 

3,164

 

Add: Amortization of acquired intangible assets

272

 

 

61

 

 

397

 

 

262

 

Non-GAAP subscription gross profit

$

167,445

 

 

$

86,727

 

 

$

437,397

 

 

$

223,355

 

 

 

 

 

 

 

 

 

GAAP subscription gross margin

77

%

 

74

%

 

77

%

 

74

%

 

 

 

 

 

 

 

 

Non-GAAP subscription gross margin

78

%

 

76

%

 

78

%

 

75

%














 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

GAAP total revenue

$

232,460

 

 

$

125,119

 

 

$

609,509

 

 

$

329,304

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(24,159)

 

 

$

(38,518)

 

 

$

(76,726)

 

 

$

(114,933)

 

Add: Stock-based compensation expense

40,610

 

 

21,966

 

 

101,961

 

 

55,577

 

Add: Amortization of acquired intangible assets

372

 

 

101

 

 

579

 

 

385

 

Add: Acquisition-related expenses

2,119

 

 

 

 

2,119

 

 

 

Non-GAAP income (loss) from operations

$

18,942

 

 

$

(16,451)

 

 

$

27,933

 

 

$

(58,971)

 

 

 

 

 

 

 

 

 

GAAP operating margin

(10)

%

 

(31)

%

 

(13)

%

 

(35)

%

 

 

 

 

 

 

 

 

Non-GAAP operating margin

8

%

 

(13)

%

 

5

%

 

(18)

%






















CROWDSTRIKE HOLDINGS, INC.

 

Non-GAAP Financial Measures with Reconciliation to GAAP (Continued)

(in thousands, except percentages and per share amounts)

(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

GAAP net loss

$

(24,531)

 

 

$

(35,505)

 

 

$

(73,627)

 

 

$

(113,371)

 

 

 

 

 

 

 

 

 

Add: Stock-based compensation expense

$

40,610

 

 

$

21,966

 

 

$

101,961

 

 

$

55,577

 

Add: Amortization of acquired intangible assets

372

 

 

101

 

 

579

 

 

385

 

Add: Acquisition-related expenses

2,119

 

 

 

 

2,119

 

 

 

Less: Gain on settlement of lawsuit

 

 

 

 

 

 

(1,250)

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss)

$

18,570

 

 

$

(13,438)

 

 

$

31,032

 

 

$

(58,659)

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing GAAP net loss per share attributable to Class A and Class B common stockholders, basic and diluted

219,401

 

 

204,096

 

 

216,432

 

 

128,009

 

Weighted-average shares used in computing Non-GAAP net income (loss) per share attributable to Class A and Class B common stockholders, basic

219,401

 

 

204,096

 

 

216,432

 

 

128,009

 

Weighted-average shares used in computing Non-GAAP net income (loss) per share attributable to Class A and Class B common stockholders, diluted

234,626

 

 

204,096

 

 

232,969

 

 

128,009

 

 

 

 

 

 

 

 

 

GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.11)

 

 

$

(0.17)

 

 

$

(0.34)

 

 

$

(0.89)

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss) per share attributable to common stockholders, basic

$

0.08

 

 

$

(0.07)

 

 

$

0.14

 

 

$

(0.46)

 

Non-GAAP net income (loss) per share attributable to common stockholders, diluted

$

0.08

 

 

$

(0.07)

 

 

$

0.13

 

 

$

(0.46)

 

















 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

GAAP total revenue

$

232,460

 

 

$

125,119

 

 

$

609,509

 

 

$

329,304

 

 

 

 

 

 

 

 

 

GAAP net cash provided by operating activities

88,501

 

 

38,635

 

 

242,103

 

 

33,836

 

Less: Purchases of property and equipment

(9,911)

 

 

(29,689)

 

 

(40,245)

 

 

(66,848)

 

Less: Capitalized internal-use software

(2,495)

 

 

(1,898)

 

 

(6,345)

 

 

(5,208)

 

Free cash flow

$

76,095

 

 

$

7,048

 

 

$

195,513

 

 

$

(38,220)

 

 

 

 

 

 

 

 

 

GAAP net cash provided by (used in) investing activities

$

(98,375)

 

 

$

(27,262)

 

 

$

512,728

 

 

$

(57,516)

 

GAAP net cash provided by (used in) financing activities

$

5,171

 

 

$

(968)

 

 

$

39,606

 

 

$

678,834

 

 

 

 

 

 

 

 

 

GAAP net cash used in operating activities as a percentage of revenue

38

%

 

31

%

 

40

%

 

10

%

Less: Purchases of property and equipment as a percentage of revenue

(4)

%

 

(24)

%

 

(7)

%

 

(20)

%

Less: Capitalized internal-use software as a percentage of revenue

(1)

%

 

(2)

%

 

(1)

%

 

(2)

%

Free cash flow margin

33

%

 

6

%

 

32

%

 

(12)

%














































CROWDSTRIKE HOLDINGS, INC.

 

Statements of Operations: GAAP to Non-GAAP Reconciliations
(in thousands)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

GAAP cost of revenue

$

61,527

 

 

$

37,355

 

 

$

162,813

 

 

$

98,211

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

4,777

 

 

2,450

 

 

11,803

 

 

4,695

 

Amortization of acquired intangible assets

272

 

 

61

 

 

397

 

 

262

 

Non-GAAP cost of revenue

$

56,478

 

 

$

34,844

 

 

$

150,613

 

 

$

93,254

 

 

 

 

 

 

 

 

 

GAAP subscription gross profit

$

163,947

 

 

$

85,000

 

 

$

429,144

 

 

$

219,929

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

3,226

 

 

1,666

 

 

7,856

 

 

3,164

 

Amortization of acquired intangible assets

272

 

 

61

 

 

397

 

 

262

 

Non-GAAP subscription gross profit

$

167,445

 

 

$

86,727

 

 

$

437,397

 

 

$

223,355

 

 

 

 

 

 

 

 

 

GAAP professional services gross profit

$

6,986

 

 

$

2,764

 

 

$

17,552

 

 

$

11,164

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

1,551

 

 

784

 

 

3,947

 

 

1,531

 

Non-GAAP professional services gross profit

$

8,537

 

 

$

3,548

 

 

$

21,499

 

 

$

12,695

 

 

 

 

 

 

 

 

 

GAAP sales and marketing operating expenses

$

105,602

 

 

$

68,675

 

 

$

288,867

 

 

$

190,792

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

12,811

 

 

7,355

 

 

35,101

 

 

15,511

 

Amortization of acquired intangible assets

91

 

 

30

 

 

153

 

 

92

 

Non-GAAP sales and marketing operating expenses

$

92,700

 

 

$

61,290

 

 

$

253,613

 

 

$

175,189

 

 

 

 

 

 

 

 

 

GAAP research and development operating expenses

$

57,539

 

 

$

35,992

 

 

$

148,600

 

 

$

91,497

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

11,771

 

 

4,696

 

 

25,700

 

 

10,353

 

Amortization of acquired intangible assets

9

 

 

10

 

 

29

 

 

31

 

Non-GAAP research and development operating expenses

$

45,759

 

 

$

31,286

 

 

$

122,871

 

 

$

81,113

 

 

 

 

 

 

 

 

 

GAAP general and administrative operating expenses

$

31,951

 

 

$

21,615

 

 

$

85,955

 

 

$

63,737

 

Less:

 

 

 

 

 

 

 

Stock based compensation expense

11,251

 

 

7,465

 

 

29,357

 

 

25,018

 

Acquisition-related expenses

2,119

 

 

 

 

2,119

 

 

 

Non-GAAP general and administrative operating expenses

$

18,581

 

 

$

14,150

 

 

$

54,479

 

 

$

38,719

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(24,159)

 

 

$

(38,518)

 

 

$

(76,726)

 

 

$

(114,933)

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

40,610

 

 

21,966

 

 

101,961

 

 

55,577

 

Amortization of acquired intangible assets

372

 

 

101

 

 

579

 

 

385

 

Acquisition-related expenses

2,119

 

 

 

 

2,119

 

 

 

Non-GAAP income (loss) from operations

$

18,942

 

 

$

(16,451)

 

 

$

27,933

 

 

$

(58,971)

 
































CROWDSTRIKE HOLDINGS, INC.

 

Statements of Operations: GAAP to Non-GAAP Reconciliations (continued)
(in thousands, except per share amounts)
(unaudited)

 

 

Three Months Ended October 31,

 

Nine Months Ended October 31,

 

2020

 

2019

 

2020

 

2019

GAAP net loss

$

(24,531)

 

 

$

(35,505)

 

 

$

(73,627)

 

 

$

(113,371)

 

Add:

 

 

 

 

 

 

 

Stock based compensation expense

40,610

 

 

21,966

 

 

101,961

 

 

55,577

 

Amortization of acquired intangible assets

372

 

 

101

 

 

579

 

 

385

 

Acquisition-related expenses

2,119

 

 

 

 

2,119

 

 

 

Less:

 

 

 

 

 

 

 

Gain on settlement of lawsuit

 

 

 

 

 

 

(1,250)

 

Non-GAAP net income (loss)

$

18,570

 

 

$

(13,438)

 

 

$

31,032

 

 

$

(58,659)

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing basic net income (loss) per share (GAAP and Non-GAAP)

219,401

 

204,096

 

216,432

 

128,009

 

 

 

 

 

 

 

 

GAAP basic net loss per share

$

(0.11)

 

 

$

(0.17)

 

 

$

(0.34)

 

 

$

(0.89)

 

 

 

 

 

 

 

 

 

Non-GAAP basic net income (loss) per share

$

0.08

 

 

$

(0.07)

 

 

$

0.14

 

 

$

(0.46)

 

 

 

 

 

 

 

 

 

GAAP diluted loss per common share

$

(0.11)

 

 

$

(0.17)

 

 

$

(0.34)

 

 

$

(0.89)

 

Stock-based compensation

0.17

 

 

0.11

 

 

0.44

 

 

0.43

 

Amortization of acquired intangible assets

 

 

 

 

 

 

 

Acquisition-related expenses

0.01

 

 

 

 

0.01

 

 

 

Gain on settlement of lawsuit

 

 

 

 

 

 

0.01

 

Provision for income taxes (1)

 

 

 

 

 

 

 

Adjustment to fully diluted earnings per share (2)

0.01

 

 

(0.01)

 

 

0.02

 

 

(0.01)

 

Non-GAAP diluted income (loss) per common share

$

0.08

 

 

$

(0.07)

 

 

$

0.13

 

 

$

(0.46)

 

 

 

 

 

 

 

 

 

Weighted-average shares used in diluted net income (loss) per share calculation:

 

 

 

 

 

 

 

GAAP

219,401

 

 

204,096

 

 

216,432

 

 

128,009

 

Non-GAAP

234,626

 

 

204,096

 

 

232,969

 

 

128,009

 

_____________________________

###

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our financial performance and liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period.

Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.


Non-GAAP Subscription Gross Profit and Non-GAAP Subscription Gross Margin

We define non-GAAP subscription gross profit and non-GAAP subscription gross margin as GAAP subscription gross profit and GAAP subscription gross margin, respectively, excluding stock-based compensation expense and amortization of acquired intangible assets. We believe non-GAAP subscription gross profit and non-GAAP subscription gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these measures eliminate the effects of certain variables unrelated to our overall operating performance.


Non-GAAP Income (Loss) from Operations

We define non-GAAP income (loss) from operations as GAAP income (loss) from operations excluding stock-based compensation expense, amortization of acquired intangible assets, and acquisition-related expenses. We believe non-GAAP income (loss) from operations provides our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as this metric generally eliminates the effects of certain variables unrelated to our overall operating performance.


Non-GAAP Net Income (Loss) per Share Attributable to Common Stockholders, Basic and Diluted

We define non-GAAP net income (loss) per share attributable to common stockholders, as non-GAAP net income (loss) divided by the weighted-average shares outstanding, which includes the dilutive effect of potentially diluted common stock equivalents outstanding during the period. We may periodically incur charges or receive payments in connection with litigation settlements. We exclude these charges and payments received from non-GAAP net income (loss) when associated with a significant settlement because we do not believe they are reflective of ongoing business and operating results.


Free Cash Flow

Free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment and capitalized internal-use software. We monitor free cash flow as one measure of our overall business performance, which enables us to analyze our future performance without the effects of non-cash items and allow us to better understand the cash needs of our business. While we believe that free cash flow is useful in evaluating our business, free cash flow is a non-GAAP financial measure that has limitations as an analytical tool, and free cash flow should not be considered as an alternative to, or substitute for, net cash provided by operating activities in accordance with GAAP. The utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for any given period. In addition, other companies, including companies in our industry, may calculate free cash flow differently or not at all, which reduces the usefulness of free cash flow as a tool for comparison.

Explanation of Operational Measures


Annual Recurring Revenue

ARR is calculated as the annualized value of our customer subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. To the extent that we are negotiating a renewal with a customer after the expiration of the subscription, we continue to include that revenue in ARR if we are actively in discussion with such an organization for a new subscription or renewal, or until such organization notifies us that it is not renewing its subscription.


Magic Number

Magic Number is calculated by performing the following calculation for the most recent four quarters and taking the average: annualizing the difference between a quarter’s Subscription Revenue and the prior quarter’s Subscription Revenue, and then dividing the resulting number by the previous quarter’s Non-GAAP Sales & Marketing Expense. Magic Number = Average of previous four quarters: ((Quarter Subscription Revenue – Prior Quarter Subscription Revenue) x 4) / Prior Quarter Non-GAAP Sales & Marketing Expense.

View source version on businesswire.com:https://www.businesswire.com/news/home/20201202005868/en/

CONTACT: Investor Relations Contact

CrowdStrike Holdings, Inc.

Maria Riley, Senior Director of Investor Relations

[email protected]

669-721-0742Press Contact

CrowdStrike Holdings, Inc.

Ilina Cashiola, Senior Director of Public Relations

[email protected]

202-340-0517

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: TECHNOLOGY DATA MANAGEMENT

SOURCE: CrowdStrike Holdings, Inc.

Copyright Business Wire 2020.

PUB: 12/02/2020 04:05 PM/DISC: 12/02/2020 04:05 PM

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